What are the SME Policies and Measures in Japan?

: The Outline of SME Promotion Policies in Japan

Note

What are the SME Policies and Measures in Japan? : The Outline of SME Promotion Policies in Japan
SEKI, Tomohiro
I. Introduction
SMEs have far more impor tance among enterprises in Japan compared with other developed countries. SMEs are widely expected to play an impor tant role in economic development and lives of the citizens. Concrete and abundant political assistance has long been offered for SMEs, especially in postwar Japan. It is well known worldwide that various assistance menus are available for SMEs. However not only is the system / content complicated but also there are a number of diverse agencies which offer assistance. It is far from easy to comprehend the roles of each agency. Furthermore, despite the concrete and abundant assistance menus, they are not generally well known to their objects, SMEs in Japan. (Example, SEKI [2004], HONDA [2006], etc.) Though careful discussion is required how we should think about the fact that SME ' s policies and measures in Japan are not well known to the users, one of the reasons may be that there are not very many which describe the system and content of such policies and measures in simple terms. This paper aims to explain the true picture of SME policies and measures especially in postwar Japan in the most simple possible terms and tries to explain the system and contents. That is the purpose of this paper. This paper consists of the following: Section II describes the outline of the position of SME policies and measures in the policy system in Japan. Following section III describes the outline of histor y of SME's policies and measures in postwar Japan. Chapter IV is the conclusion.

II. Positioning
This chapter describes the outline of position of SME 's policies and measures in the policy system in Japan. First, what are the SME policies? No doubt they are policies meant specifically for SMEs. The definition of SME determined in the Small and Medium Enterprises Basic Law which was established in 1963 and went through complete modification in 1999. Only the quantitative index ( number of employees /capital amount ) is adopted in Japan, and the definition is established for each of the four industries; manufacturing, wholesale, retail, and service. One of the policy main bodies to implement SME policies is Small and Medium Enterprise Agency of the central gover nment. In the national administrative organization, the Small and Medium Enterprise Agency is an outside agency of the Ministry of Economy, Trade and Industr y (METI) as of the time of its establishment. METI and Small and Medium Enterprise Agency themselves are in Kasumigaseki, Tokyo, and there are 8 Regional Bureaus of Economy, Trade and Industr y to control the regional blocks (Hokkaido, Tohoku, Kanto, Chubu, Kinki, Chugoku, Shikoku and Kyushu ) as well as the Okinawa General Bureau. The Organization for Small and Medium

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Enterprises and Regional Innovation, Japan (SMRJ) is a fairly similar organization to control regional blocks. There is no Hokuriku Regional Bureau of Economy, Trade and Industry. Japan SMRJ was established when the Small and Medium Enterprise Corporation (established by a merger in October, 1980, between the Small and Medium Enterprise Promotion Corporation, est. in August, 1967 and the Small and Medium Enterprise Mutual Aid Corporation, est. in April, 1978 ) , the Small Business Credit Insurance Corporation, est. in July, 1958, and the Textile Industr y Str uctural Improvement Corporate Association, est. in June, 1994 merged into one in July, 1999, with further addition of the Japan Regional Development Corporation and Industrial Structure Improvement Fund in 2004. Basically, policy implementation main body as Small and Medium Enterprise Agency is Regional Bur eau of Economy, T rade and Industry and SMRJ. Another policy main body consists of prefectures, municipalities, and special districts (Tokyo 23 Districts). Prefectures tend to take on the policies of central government. Many of the SME policies are made by the national government and are taken on by the prefectures. Also the municipalities have taken on the policies of the prefectures. In other words, it is a str ucture of Small and Medium Enterprise Agency (Regional Bureaus, SMRJ) prefectures municipalities. The economy department and commerce, industry and labor department in prefectures and municipalities are in charge of SME assistance and formulate policies. However, local gover nments are obligated to make individual SME policies in recent years, therefore, some local governments make their own SME's policies/assistance. By the way, SME Support Centers are placed in prefectures and government ordinance cities as an organization to promote SME suppor t projects done by central gover nment, prefectures and SMRJ. The center is based on

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Small and Medium Enterprise Suppor t Law established in 1963. Also there are various organizations to promote SME suppor t projects such as the Chamber of Commerce and Industry, Societies of Commerce and Industry, Federation of Small Business Associations, gover nment finance institutions and Federation of Credit Guarantee Corporations, etc. Small and Medium Enterprise Agency (Regional Bureaus, SMRJ) consider the support level for SMEs in three patter ns; regional blocks, prefectures and local communities. SMRJ controls regional block level, SME Suppor t Centers in prefectures, etc, control prefecture level, and local SME Support Centers established in Chamber of Commerce and Industr y control local communities. For each support system, the proper level of organization is examined and divided . The budget for SME policies established by the central government belongs, in addition to Regional Bureaus of Economy, T rade and Industry, to Ministry of Finance and Ministry of Health, Labour and Welfare as SME measure budget. However, the ratio of SME measure budget is not large in the general budget despite the high relative weight of SME in Japan and the awareness of their roles and importance, which will be described later.

III. History2)
This section outlines the histor y of SME policies and measures in postwar Japan. A period of approx. 60 years, from the 1940s to the 2000s, is divided by the unit of decade with the exception of the 1990 s and 2000 s when the policy direction made a drastic change with the modification of Small and Medium Enterprise Basic Law in 1999 to show the histor y of this change.

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What are the SME Policies and Measures in Japan? such as AJSMIA (All Japan Small and Medium Industr y Association, which later changed its name from Industry to Enterprise ), etc. Thanks to the fact that the SME policy section in GHQ was Economic Science Dept Anti Trust Cartel Section ,Basic idea concerning SME policies was protecting SME as a foundation of democracy and counter force against monopoly. The Small and Medium Enterprise Measures Prospectuswhich clearly stated economic democratization/anti-monopoly doctrine was determined.Small and Medium Enterprise General Agency was established, and later Small and Medium Enterprise Agency E s t a b l i s h m e n t L a w ( L a w N o . 8 3 ) w a s established on July 2 , 1948 .This Small and Medium Enterprise Establishment Law said We should consider that healthy independent SME help to keep the national economy healthy and become developed, prevent concentration of economic for ce, as well as securing the opportunity for fair business activities. Therefore the purpose of this law is to nurture, and develop small and medium enterprises, and at the same time, to secure various conditions for their business to improve. (Article 1 (Purpose of the Law )) The following Ar ticle 2 describes the establishment,base on National Government Organization Law, Small and Medium Enterprise Agency is established as an outside agency of Ministry of International Trade and Industry. SME went into excessive competition due to the conversion of large enterprises to private industr y and the slowing down of postwar demand increase in 1947. In addition, the market rapidly shrunk because of the Dodge Line, a deflationar y policy, and SMEs suf fered from shor tage of funding. These increased the necessity for policy assistance by the government for SMEs facing funding shortage, resulting in improvement of SME measures ( fundamental measures ) described in the following. One was the Small and Medium Enterprise Management Consultant System.

1. 1940s It was not until the Financial Panic of 1927 (Showa Panic) that political assistance for SME in Japan was specifically developed for the first time. The hardship suf fered by small and medium commerce and industry in agricultural and urban areas became problematic, and financial assistance became urgent business, leading SME to be the policy agenda for the first time. The Japanese gover nment accepted the Potsdam Declaration in August, 1945. After that, economic recover y in Japan was conducted under the GHQ rules. In concrete terms, various measures based on economic democratization and anti-monopoly doctrine were taken including dissolution of big financial combines and land distribution. SMEs quickly achieved the transformation from militar y industr y to private, and gathered expectation for their role. However, SMEs had serious dif ficulties in obtaining their financial and material resources, ther efor e they came to r eceive political assistance. The GHQ tried to develop SME assistance based on economy democratization and antimonopoly doctrine. However, the Japanese gover nment tried to make SME promotion guidelines based on priority industries promotion strategy by priority production system under the Yoshida Cabinet in December, 1946. This priority production system is a policy in which distribution of limited resources and finance is determined by policies to accelerate industrial growth. It was also called the priority industries (key industries) recover y strategy. Coal and steel production was given priority, together with designation of food/fer tilizer, electricity, ship building/maritime transport, etc. Excessive funds were poured into priority industries, resulting in more serious problems for SMEs in obtaining financial and material resources (SME problems). This would develop into a public movement by SME organizations

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Another was a financial measure. Specifically, the National Finance Corporation Law was established in May, 1949 , followed by the establishment of the Small and Medium-sized Enterprise Cooperative Association Act in June of the same year, paving the way for loans for SME. And the third is organizing measure. In practice, the Commerce and Industr y Cooperative Law was prepared in November, 1946. 2. 1950s A special source of demand was created when Korean War broke out in June, 1950, increasing expor ts rapidly. Along with this, mining and manufacturing industrial production increased, expanding production. From then on, economic democratization policy started regressing when the GHQ accepted Japanese gover nment ' s reviewing of democratization laws. To put it specifically, in those days, the cartel toleration view was prevailed due to the reactionar y depression after the Korean War boon, cartels excluded from the application of Anti-Monopoly Law were emerged, and legislative autonomy was established. Along with such circumstances, the Anti-Monopoly Law was modified partially in September, 1953, resulting in the approval of depression cartel and rationalization cartel. Also at this time, the Credit Guarantee Corporation Law was established in August, 1953, smoothing the finance of SMEs. ( As for the Cr edit Guarantee Corporation itself, the Tokyo Credit Guarantee Corporation in 1937 was its forerunner. The Corporation was established in Kyoto, then in Osaka. It was established all over Japan after theSmall and Medium Enterprise Financial Measures Prospectuswas ratified by the Cabinet in 1948.) Later, various measures were prepared in order for full scale industr y protection and industr y development, leading to so - called heavy and chemical industr y emphasized assistance including introduction of foreign

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technology and rationalization investment. Specifically, the 5 - Year Plan for Economic Independencewas worked out in December, 1955, in which achieving perfect employment and improvement of industrial structure were positioned as policy goals. The reasons are listed as follows: First, unemployment caused by an excessive labor force was becoming a problem and economic independence, in place of dependence on the special demand, was urgent business (reinforcing export force). Second, the postwar excessive labor force was mainly absorbed in SME and agriculture and existed as imperfect employment of low income, low salary and shor t working time (not per fect employment but all employment ) . Third, a Double structureexisted where modernized big enterprises and small enterprises by premodern labor - management relations and minute enterprises by family management as well as agriculture existed both extremities with less relative weight in the middle 3 ) . It was considered thatall employmentwas created because the labor force excluded from the moder n section would r ush to premoder n section regardless of income. Originally, the double structure problem meant employment problem, however, the premodern nature of technology to lower salaries became the problem ( Aging facility, low productivity and excessive competition among SMEs were the obstacle for impr oving quality of expor t products). The image was SME bottom line of double str ucture ( economic main body containing problems). It was SME modernization that was considered to solve the double structure, and the following two SME modernization measures (industrial structure policy) were adopted. One was rationalization policy per industrial category, namelyMachine Promotion Law (Law of Temporar y Measures for Promotion of Machine Industr y) established in June, 1956 , and Electronics Promotion Law (Law of Temporar y Measures

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What are the SME Policies and Measures in Japan? TheNew Industrial System Theoryhas the following characteristics. First, nur tur e industries with high income elasticity of demand and productivity growth rate as the core. Income elasticity of demand shows how much demand will increase when income is increased by one unit. It was the machine industr y which was chosen as an industr y with both income elasticity and productivity growth rate. Second, economies of scale by oligopoly (scale merit) wer e pursued. Thir d, active gover nment involvement is encouraged. This was called of ficial and private cooperation , and later became a feature of industrial policy in Japan, especially attracting attention from many countries in the 1980s. Fourth, various policies concerning trade, finance, labor and SME are used as methods to achieve industrial structure improvement . Industrial str ucture improvement was positioned as a so - called ultimate goal of various policies in Japan. To this, the Industr y Restr ucturing Theor y is for promoting expansion of heavy and chemical industries. We can say the basic attitude of new industrial system theory is about the same. For example, Yahata Iron and Steel and Fuji Iron and Steel merged in 1970 . The theor y logically supported a rampant large scale merger to bring about industrial restructuring. Taking these into consideration, the law improvement proceeded for securing new industrial systemin the process of establishing the Small and Medium Enterprise Basic law. The movement was especially visible in establishing the Specific Industries Promotion Law . However, various economic organizations displayed apprehension about the establishment of this law. In other words, they were afraid of reinforcement/expansion of official control by the administration to the industries. At this time, establishment of the Small and Medium Enterprise Basic Law was conducted simultaneously. There was an understanding that both the Specific Industries Promotion

for Promotion of Specific Electronic Industr y and Specific Machine Industry)established in June, 1957 . Measur es conducted in big enterprises were penetrating SMEsas well . Another was facility modernization policy. The Small and Medium Enterprise Promotion Fund Assistance Law ( Communal Facility Grant and Small and Medium Enterprise Facility Modernization Grant ) were established in May, 1956 . Unfairness correction measures were reinforced together with modernization. This was to correct excessive competition among SMEs and pressure by big enterprises.1) As for competition limiting unfairness correction, there were the Small and Medium Enterprise Organization Law ( The commercial and industrial association system was established and the government ordered outsiders to join the association) established in November, 1957, and the Department Store Law (Approval was required for new building and enlargement) established in May, 1956 , etc. Another policy was competitive policy unfairness correction policy. The Subcontract Payment Law (the Law on the Prevention of Delay in the Payment of Subcontracting Charges and Related Matters) w a s e s t a b l i s h e d i n J a n u a r y, 1 9 5 6 , c o m plementing the Anti-Monopoly Law. 3. 1960s T ransition to an open economy system, international competitiveness reinforcement, and industrial structure improvement with the effort of official and private sectors as one were promoted at the end of 1950s. To the striking expansion of expor t from Japan, heightened requests for impor t liberalization came from many countries, and the T rade Foreign Exchange Liberalization Plan Prospectuswas decided by the Cabinet in June, 1960. After this, theNew Industrial System Theory / Industry Restr ucturing Theor y became rampant to reinforce the international competitiveness of Japanese industry.

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Lawand Small and Medium Enterprise Basic Law would secure the role of big enterprises and SMEs, and promise assistance for them along with the industrial structure improvement with the aim of inter national competitiveness enhancement of the Japanese industries. ( OBAYASHI [ 2003 ] p. 49 ) 4 ) . The Specific Industries Promotion Law ended up being abandoned, however, establishment of Small and Medium Enterprise Basic Law was promoted. Gap correctionbetween big enterprises and SMEs was left to industrial str ucture advancement and international competitiveness reinforcement. So the Small and Medium Enterprise Basic Law was promulgated and went into effect in July, 1963. The Introduction of the Small and Medium Enterprise Basic Law states as the following; ( omitted ) as well as correct the disadvantage of SMEs due to economic and social restriction, SMEsto help their independent efforts, and to plan their growth and development is to respond to the mission of SMEs...to advance the industrial structure and reinforce inter national competitiveness of industries to achieve balanced growth and development of national economy.(Omission made by the author ) . Her e, cor r ecting disadvantagemeanscorrecting various gaps among enterprises which was mentioned in Article 1. There are two key basic goals in the Bas i c L a w. O n e i s advancement of SME (Chapter II). In concrete terms, there are 1) facility moder nization, 2) technology improvement, 3) management rationalization, 4) appropriation of company size, 5) organization improvement for joint business, 6) moder nization of commercial and ser vice industries, 7 ) business conversion, and 8 ) various policies for labor, employment and training. Another basic goal is cor recting disadvantage in business activities (Chapter III). Specifically, there are 1) prevention of excessive competition, 2 ) appropriation of subcontract

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business, 3 ) securing fair oppor tunity for business activities, 4) securing opportunities for of ficial demand, etc. The former SME advancement was especially emphasized, and more than others, appropriate scale and i n t e n s i f i c a t i o n ( m e r g e r, c o l l a b o r a t i o n , cooperation, grouping)for 1)-6) goals were emphasized and concrete measures were developed. However, not many concr ete measures were developed for others. There are two pillars for measures to advance appropriate scale and intensification. One is Small and Medium Enterprise Modernization Promotion Law ( Moder nization Promotion Law)(promulgated in March, 1964, enacted in April), and the other is theSmall and Medium Enterprise Advancement Financial System which helps intensification in financial aspect. Moder nization Promotion Law designates industries to actualize industrial str ucture improvement and international competitiveness reinforcement, decide goals such as appropriation of scale, etc, and assist SMEs which conduct investment that suits decided goal, in the financial aspect. In the beginning, however, intensification did not progress because it favored an individual enterprise base. Therefore,Structure Improvement Business Systemwas created to advance industry-wide mer gers, collaboration, cooperation and grouping of SME. It was accepted that intensification of individual SME would advance if there was an industry-wide promotion system such as commercial and industrial association per industr y. We can say it was a full scale modernization measure per industry , grasping SMEs as an industrial group. On the other hand, the Small and Medium Enterprise Advancement Financial System was a complement and expansion to the Small and Medium Enterprise Promotion Fund Assistance Law (May, 1956), and it was modified in 1961 to include joint facility business and organized business such as factories, etc, (factory complex construction) of

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What are the SME Policies and Measures in Japan? p. 25 ) , It established Industrial Str ucture Policy T ype Small and Medium Enterprise Policy ( KUROSE [ 2006 ] ) , etc. Small and Medium Enterprise Basic Law made SME policies method to achieve the goal of actualizing industrial str ucture improvement and international competitiveness reinforcement, and basic measures were mobilized by it. 4. 1970s Advanced economic growth was actualized accompanying heavy and chemical industrialization in 1960s, and active equipment investment promotion and productivity improvement was observed in SMEs. However, the Nixon Shock in 1971 ( dollar and gold exchange termination) and later transition to the floating exchange - rate system, and the oil shocks which happened twice in 1973 revealed SME's excessive productivity, and many SMEs had no choice but to file for bankruptcy together with the big depression of the following year ( modernized bankruptcy ). These exposed the dead - end of industrial str ucture policy for international competitiveness reinforcement of heavy and chemical industries. Also there were new problems such as saturation of consumer durables, Japan-US trade friction, pollution, etc. Reaching these new aspects, the government came up with a vision, and measures based on this vision started to develop. TheIndustrial Str ucture Vision in the 1970 s ( May, 1971 ) described industrial policies ( industrial structure policies ) in the 1970 s. Knowledge intensificationcame out as a key word in this. F o l l o w i n g t h i s , t h e S m a l l a n d M e d i u m Enterprise Vision in the 1970s(August, 1972) came out. It clearly spoke of pr omoting conversion of SME policies forresponding to demand for sophistication/diversification and promoting international division of labor , and, in order to realize such goals,measures in soft aspects rather than rationalization in SME productionwere also promoted. Thus SME's

SME association for grant. Furthermore, it was again modified in 1963 to include enterprise joint business (merger), retail stores collaboration business ( assembled depar tment store ) , wholesale store organizing business (wholesale complex construction) for grant, and the name was changed to the Small and Medium Enterprise Modernization Fund Assistance Law and the grant for these was called theSmall and Medium Enterprise Advancement Fund . In addition, t he Small Business Pr omotion Corporation ( now the organization has been restructured to become the Organization for Small & Medium Enterprises and Regional Innovation 5 was established in 1967 as a promoter of the Advancement Financial System, composing a str uctur e of corporation additional funding from prefectures loan to SME associations, etc. As for disadvantage correction at this time, it was considered that correcting the productivity gap between big enterprises and SMEs would be achieved bystructure improvement , so it was seldom implemented systematically. Along with the establishment of the Small and Medium Enterprise Basic Law, there was no particular new movement for disadvantage correction measures, and disadvantage correction measure stuck tosupplementar y positionto improve SME business/competition environment for str ucture improvement . Activation of disadvantage cor rection measures did not happen until after the 1970s. Of course, at a time of depression, reinforcement and modification of theSubcontract Payment Lawwas conducted and the Law on Ensuring the Receipt of Orders from the Gover nment and Other Public Agencies by Small and Medium Enterprises was established in June, 1966. As for the Small and Medium Enterprise Basic Law established in 1963, critics sayIt played a role to combine various measures which had been searched for and tried since 1945 in industrial policylogic.(TERAOKA [1997]

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policies in Japan decided SME's policies vision upon receiving industrial policies vision, and started to design concrete measures.. A similar process was adopted in the 1980 s and 1990 s (KUWAHARA [2006] p.59). Knowledge intensificationisincreasing the ratio of industries with higher invested intellectual labor . Intellectuality intensified industry is positioned to be the leading industry. In concrete terms, there are the research and development intensified industry, the advanced level assembly industr y, the fashion industr y, and the knowledge industry, etc. Especially the IC industr y and computer industr y, both research and development intensified industry, became the object of emphasized development, an d n u r t u r i n g measur es for electr onic/ information industry were improved in industrial policies. Specifically, the Machine and Electronics Law (Law of Temporary Measures for Promotion of Specific Electronic Industr y and Specific Machine Industr y ) ( Machine Promotion Law and Electronics Promotion Law) were implemented in April, 1971, and theLaw of Temporar y Measures for Promotion of Specific Machine Information Industry(SMEs in charge of machiner y + electronics + knowledge intensified industr y) was implemented in July, 1978. Upon this, knowledge intensification was aimed in SME policies, and the following three measures were developed. First was knowledge in ten s i f i e d c o op erative business. It was incorporated in the Advancement Financial System, and assistance was offered in the unit of commercial and industrial associations. Also the Producing Place Law ( Law of Temporar y Measures for Small and Medium Enterprises in Producing Place)(implemented in July, 1979) was established. This was for assisting development of new products/new technology of producing place associations. Second was the Business Conversion Law ( Temporar y Law concerning Measures for Changing Business for

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Specific Small and Medium Enterprises ) (implemented in December, 1976). In particular, the textile industry was targeted. Third was the information supplying business ( 1973 ) . The Information Center for Small and Medium Enterprises was set up in the Small Business Promotion Corporation. Critics say such knowledge intensification measures had no ef fect (KUROSE [2006]). First, as for knowledge intensified cooperative business and Producing Place Law , it was beyond the ability of commercial and industrial associations and producing place associations to set and implement research and development themes in the first place. In fact, the number of implementations was 45 in FY1973 - FY1980, and as few as 16 in FY1981 - FY1990. Second, as for the Business Conversion Law, shrinking existing business to half and conver ted new business had to be more than half in order to obtain approval from the prefectures. Until New Temporar y Law concer ning Measures for Changing Business for Specific Small and Medium Enterprises whose ratio of new business was decreased from half to one third in 1986, the number of the approved was only 293 ( of which 132 manufacturing ) . Third, as for infor mation supplying business, available information was not directly useful for SME management. Thus, there were many problems in knowledge intensification measures. Moreover, the following two measures were newly developed without scrapping measures to respond to industr y growth in the idea of traditionalscale appropriation and intensification . One was Subcontract Small and Medium Enterprise Promotion Law (Subcontract Promotion Law) (implemented in D e c e m b e r, 1 9 7 0 ) a s a m e a s u r e f o r subcontracting enterprises. This was to promote modernization of subcontracting enterprises based on Subcontracting Small and Medium Enterprises Promotion Business Plan (made by

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What are the SME Policies and Measures in Japan? nur turing ) , and that industrial adjustment (shrinking specific industrial field, conversion to other industrial field ) would be assisted. Responding to this, Small and Medium Enterprise Vision in the 1980 s ( July, 1980 ) came out as SME policy vision, and the following measures were developed. 1 ) Enrichment measure of soft management resources, 2 ) Measures in the regional viewpoint, added by 3) Measures to promote expansion into new field, and 4) Cross-industrial exchange measure. First of all, 1)Enrichment measure of soft management resources means creative knowledge intensification , i.e., advancement of knowledge intensification. Concrete measures were developed in technical, human resources and information aspects. First in technical aspect, technology development plans in advanced high technology field such as electronics, new material and bio, etc, were a p p r o v e d o n Te c h n o l o g y L a w ( L a w o f Temporar y Measur es for Technology Development Promotion for Small and Medium Enterprises) (implemented in July, 1985). Such measures were taken as assisting technology development fund or partial exempting taxation of test and research expenses. Next, in the information aspect, the software advisor y business ( Regional Information Centers for Small and Medium Enterprises as its core) was conducted with dispatched specialists. Finally, in the human resource aspect, the Institute for Small Business Management and Technology was opened, and training for SME managers was held ( initially in Tokyo and Osaka, later expanded to 9 locations throughout Japan). Next, 2) Measures in the regional viewpoint means promoting the producing place ( local industr y ) and specific regions ( depressed region: castle town). In the 1970s, designation of regions was conducted for industries such as Traditional Products Law ( Law concerning Promotion of Traditional Craft Products) (May, 1974). Producing Place Law(July, 1979) in

subcontract business association by cooperation of parent companies). The other was measures for small and medium commercial industr y. There were theRetail Promotion Law (Small and Medium Retail Industry Promotion Law ) ( shopping street modernization, joint store construction) implemented in September, 1973, andLarge Store Lawimplemented in March, 1974, etc. Also as a protective measure for the depression of 1974, there were theMutual Aid Law to Prevent Small and Medium Enterprises from Bankruptcy(implemented in December, 1977 ) and the Castle Town Law ( Law of Temporar y Measures for Small and Medium Enterprises in Specific Depressed Area (implemented in November, 1978), as well as the Large Store Law(implemented in March, 1 9 7 4 ) a n d t h e F i e l d A d j u s t m e n t L a w (implemented in September, 1977) (to adjust big enterprises from advancing into the small and medium enterprise field) as a competition restrictive disadvantage correcting measure. Competitive policy type disadvantage cor rection measures were not reinforced. Though the Anti-monopoly Law was reinforced and modified in 1977, the number of violations of the Subcontract Payment Law increased. 5. 1980s Production declined in the depression of 1974 and 1975, however, cost cutting was pursued in core industries (automobile industry, electronics related equipment industr y) by retrenchment and ME (microelectronics) utilization, resulting in increased export to the U.S, Southeast Asia, etc. Trade friction was caused especially in the trade with the U.S. Industrial policy vision was settled in the 1980s just like in the 1970s. This wasInternational Policy Vision in the 1980s (March, 1980). Going through Japan-U.S. trade friction, it was clearly stated that impor t expansion andcreative knowledge intensification , which would not internationally compete, would be promoted (industr y

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the 1970s. However, the feature after 1980s is that the measures regarded SME as regional industrial group. Specifically, one is measures for General Promotion of Local Industr y (FY1981). Assistance is given by the national gover nment to the promotion measures conducted by local industr y association based on local industry promotion vision made by the governors of prefectures. Construction of Local Industry Promotion Center was its showpiece. Another one was theNew Castle Town Law (1983).This was evolved from theCastle Town Law(implemented in November, 1978), and became the Temporar y Law concer ning Measures for Small and Medium Enterprises of Specific Regions(implemented in December, 1986) after merging with theProducing Place Law . Assistance is given to SMEs going into new fields regardless of the industrial category from the viewpoint of regional promotion. And with 3) Measures to promote expansion into new field, assistance in going into new field was given to SMEs who faced shrinking markets due to the rapid decrease of export (import) of SME products caused by the rapid increase in the value of the yen. Originally, the Business Conversion Law ( implemented in December, 1976 ) had been established, which was re established asNew Business Conversion Law (implemented in Februar y, 1986). Its feature was to combine various concepts such as business diversification, product sophistication / adding value, new product/new technology development, and expansion into foreign markets, etc, besides business conversion into one under the notion of expansion into new field . Conversion ratio was decreased from half to one third. Expansion into new field was planned in the aforementioned theTemporary Law concer ning Measur es for Small and Medium Enterprises of Specific Regions . Fur thermore, assistance was developed for activation of expansion into foreign markets (overseas investment advisor business, overseas

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direct investment fund loan system, etc.). Finally, 4 ) Cr oss - industrial exchange measure. Cross - industrial exchange began gaining attention in mid 1970 s, but they say concrete measures did not begin until Technical exchange plaza business ( FY 1981 ) which of fered a place of exchange for SMEs in dif ferent industries. Also the Merger Law (implemented in April, 1988) aimed for merger of knowledge and know - how among SME in dif ferent industries. Assistance classified by levels of exchange development starting business market development was developed. Financial assistance and tax preferential treatment were given especially for development . At least 700 groups, as many as 20,000 enterprises participated as of May, 1987, marking a huge success. Also measures for assisting star t - ups and start of new business developed in the 1980s. It star ted when Venture Enterprise Center (VEC)was established under the jurisdiction of MITI Machine Information Industry Bureau (later transferred to Industrial Policy Bureau in 1994 ) in 1975 . This would guarantee debt payment of unsecured loan concerning research and development fund, and enterprising fund to the financial institutions, however, business size was small. It started to develop in full force after the Plaza Agreement. Specifically, the following measures were taken; 1 ) Business Incubator (assistance for establishment based onPrivate Activation Law(implemented in May, 1986), mainly the Third sector by cooperation between the private sector and local government), and 2) the New Business Law ( Industrial Policy Bureau, implemented in December, 1989). 6. 1990s, 2000s The main goal of industrial structure policies in the 1960s was industr y nurturing, however, the industry adjustment function started to kick in during the 1970s, and industr y adjustment became the main goal of industrial structure

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What are the SME Policies and Measures in Japan? Universities to Private Industr y , etc. ) were developed, followed by the industrial cluster plan ( lead by Regional Bureaus of Economy, Trade and Industr y ) ( FY 2001 ) /intellectual cluster creation business ( by Ministr y of Education, Cultur e, Spor ts, Science and Technology, lead by local gover nments ) ( FY 2002 ) . However, the successful result of collaboration between industr y and academia could not be found, so Enterprise structure adjustmentwas promoted after going through the financial crisis of 1997 and 1998. Specifically, selection and concentration of enterprises was promoted by theAct on Special Measures for Industrial Revitalization(1999), etc. (Later, it was modified and the Chamber of Commerce and Industr y and Societies of Commerce and Industr y became the Small and Medium Enterprise Rehabilitation Suppor t Business Agency.) Because of the industrial policy vision, SME policies became competition policies, too. The Small and medium enterprises in charge of competition was positioned as the first role expected of SMEs in Small and Medium Enterprise Policy Vision in the 1990s(June, 1990 ) , and industr y adjustment adoption measures for SMEs were developed. Specifically, there was 1) theTemporar y Law concerning Measures for Smooth Adaptation to Structural Changes in Economy by Advancement of Specific Small and Medium Enterprises to New Fields, etc(implemented in November, 1993). This was established and implemented when New Business Conversion Law expired in April, 1993 , and field limitation was relaxed (manufacturing + printing/software, etc.). Also theTemporary Law concerning Measures for Smooth Adaptation to Structural Changes in Economy by Advancement of Specific Small and Medium Enterprises to New Fields, etc was refor med and 2 ) the Law on Suppor ting Business Innovation of Small and Medium Enterprises(implemented in July, 1999) came

policy along with industr y nur turing. Fur thermore, in the late 1980 s SME policies became industr y adjustment type SME p o l i c i e s ( K U R O S E [ 2 0 0 6 ] p . 1 9 1 ) . T h e awar eness changed that SMEs adopting environmental change was more important than correcting the gapfrom big enterprises. Gap correction, which was originally the central pillar of SME policies, disappear ed, and appropriation of scale and intensificationdid not keep pace with the time. Thus the basic structure of the Small and Medium Enterprise Basic Law started to collapse. There was a change in the industrial policy vision. In theInternational Trade and Industry Policy Vision in the 1990s(1990), industrial policy vision which came out in the 1990s, there was no such goal as knowledge intensification of 1970s orcreative knowledge intensification of 1980s. The only slogan it had was actualization of a flexible and power ful industrial structure . Some thoughtInstead of holding a specific vision and guiding enterprises to go there, emphasis is on the removal of restrictive factors such as various regulations, various customs, and technical restrictions, etc. to promote innovation by suppliers.(by MITI, with par tial omission. ) In addition, another characteristic in the 1990s was the penetration of recognition that technology innovation would reveal hidden demand. The consensus of international trade and industry policy, science and technology policy and competition policy went closer to competition policy because they wouldgrapple with forming efficient market based on self responsibility principle . Specifically, start-ups and start of new business in collaboration between industry and academia was promoted. TheScience and Technology Basic Law(implemented in November, 1995), Science and Technology Basic Plan (1996) based on the law, and assistance for venture business coming from universities ( Act on the Pr omotion of Technology T ransfer fr om

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out. This assistance was for not only for expansion into new field but all business innovation. Enterprises made plans for business innovation and governors of prefectures gave approval. It was featured that no special novelty was required at the approval. Along with the establishment of Law on Supporting Business Innovation of Small and Medium Enterprises, the Moder nization Promotion Law was abandoned. Also assistance measures for start-ups and expansion into new field were expanded. Specifically, 1) There was theTemporary Law Concerning Measures for the Promotion of the Creative Business Activities of Small and Medium Enterprises (Creation Law)(April, 1995 ) . Under this law, SME manager and individuals make research and development business plans and governors of prefectures give approval. (The difference from the Law on Supporting Business Innovation of Small and Medium Enterprises is that it should a new technology development that no enterprise had ever done, and plans of individuals who are going to start business are also included.) When this law was established, theTechnology Law andMerger Lawwere abandoned. 2) In the New Business Creation Promotion Law (implemented in February, 1999), assistance for individuals and enterprises in the middle of business creation was emphasized. 3) Financial assistance system was expanded. Venture fund (Venture capital by the funding of national SME corporation advancement business + prefectures) and Limited Partnership System for Investment Business ( November, 1988 ) were organized. 4 ) For others, suppor t for establishment of incubation facility or incubator, and Collaborative Research Project by Regional Industr y, Academia, and Gover nment as a measure to suppor t industr y-academia collaboration were developed, whileSmall and Medium Enterprise Labor Security Law (implemented in August, 1991) and

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entrepreneur development business (Business Creating Seminar , etc. ) as securing human resources was developed. As opposed to these competition policy measures, protective measures reversing the principle were activated, too. This is another characteristic from the 1990 s. In response to drastic structural change of economy in the 1990s, management stability measures for SMEs were taken, and became pillars of SME's policies together with str uctural reform measures (business innovation, start-ups and expansion into new field, etc.). As for the core of management stability measures, Small and Medium Enterprise Finance Stabilizing Special Guarantee was created as a bulwark against credit cr unch since October, 1998 . ( Later systemized asSafety Net Loan System ) And bankruptcy related guarantee was expanded for SME credit guarantee system ( Safety Net Guarantee). Also adopting measures in regional unit seen in the 1980s were expanded. Specifically, it was industr y accumulation assistance whose targeting group is changed from industr y (Modernization Promotion Law) to Industry accumulation . When the Temporar y Law concerning Measures for Small and Medium Enterprises of Specific Regions expired in December, 1991, Small and Medium Enterprise Accumulation Activation Lawwas established to succeed it in October, 1992. It was an adopting measure for str uctural change, however, accumulation location of machine industry in big cities was not included in the target due to the effect of industrial location policy. Later, the Act on Temporar y Measures for Activation of Specific Regional Industrial Agglomerations ( June, 1997 ) was established as a law with Infrastr uctural Technology Industr y Accumulation added for assistance. In this, accumulation location in big cities was included as a goal due to progress of factory transfer to local region and hollowing of industr y

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What are the SME Policies and Measures in Japan? repor t of this group, the Basic Policy Examination Small Committee was held under the Small and Medium Enterprise Policy Advisor y Council in May, 1999. The modified Small and Medium Enterprise Basic Law was implemented in December, 19997). This New Basic Law is a modification of the Basic Law, however, it was also called a Fundamental conversion from the Old Basic Law . Then, how did it make aconversion? The point is summarized as the following three; First was conversion of views on SMEs. In the initial Small and Medium Enterprise Basic Law established in 1963 (hereinafter referred to as the Old Basic Law), SMEs were positioned as the bottom line of double structure (problematic SME falling into low salar y/low productivity). However, in the New Basic Law, SMEs were positioned as entities who could play an active role in national economy in charge of creating new industr y , in char ge of incr easing employment opportunity ,in charge of market competitionandin charge of local economy activation , etc. ) . In other words, it was a conversion of views on SMEs from problematic SME view to positive SME view . Second was conversion of policy goals. Generally speaking, there are two goals in a policy, the goal to be ultimately achieved and the specific goal required of achieving the ultimate goal (KUROSE [2006]). In the Old Basic Law, the ultimate goal was industrial str ucture improvement and international competitiveness reinforcement, and the concrete goal was productivity gap correction between SMEs and big enterprises. However, in the New Basic Law, the ultimate goal was maintenance and reinforcement of economic energy such as new industr y creation, and the concrete goal was growth/development of independent SME managers (self help ef for t). Third was conversion of policy method. In the Old Basic Law, between the modernization measure (SME advancement ) and disadvantage cor rective

accumulation in metropolitan areas. Specifically, accumulation of enterprises with infrastructural technology to support manufacturing in Japan such as die and foundr y was designated as A accumulation, while accumulation of local SMEs such as in producing land and business castle town was designated as B accumulation. Prefectures made activation plans, and the national government gave approval.6). As for others,3 Laws for Town Building , general term for the three laws of the Law concerning the Measures by Large-Scale Retail Stores for Preservation of Living Environment , (modified) City Planning Law , and theAct on the Improvement and Vitalization in City Center came out. The Law concerning the Measures by Large - Scale Retail Stores for Preser vation of Living Environment replaced the Big Store Law , maintaining the living environment sur rounding big stores (examination of noise preventive measure and parking lot capacity, etc. ) . ( modified ) City Planning Lawenables municipalities to decide the category/purpose ofSpecial Use District . Finally, the Act on the Improvement and Vitalization in City Centeris a law to promote downtown impr ovement and commer cial activation as one. These tried activation of downtown areas, meanwhile, more and more large stores were being built in suburbs. There was a dilemma of aiming for downtown activation despite the suburban construction of large stores. Therefore, it was not a great success. In the 1990s, the Small and Medium Enterprise Basic Law was modified. In the fall of 1997,Finance system anxietysuch as credit crunch or bad debt grew and problems of policy response to SMEs were revealed. Triggered by a clear statement to modify the Basic Law by the then - MITI minister in April, 1998 , SME policies Study Groupwas started as a private study group of Small and Medium Enterprise Agency Director in July, 1998. Responding the

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measure (disadvantage correction in business activity), emphasis was put in the former. In the New Basic Law, however, A: business innovation / start-ups / creative business promotion, B: management foundation r einfor cement/ smoothing fund supply ( complementar y measures for management resources lacking in SMEs, for example, cooperation and accumulation assistance, etc. ) , C: Smooth response for management environment change (protective assistance by improving safety net for SME which became unstable or failed competition due to the large scale movement in the market) were developed specifically. Now, the New Basic Law has contents which totally differ from those of the Old Basic Law8). Forth is shifting role of local governments. Article 4 of the Small and Medium Enterprise Basic Law (Former Basic Law) that was enacted in 1963 gives reference to local governments. It states, Local public entities must strive to devise policies that are in accordance with the national policy. In other wor ds, it was a general procedure for local governments to develop SME assistance policies in accordance with the national policies. However, the Small and Medium Enterprise Basic Law that was revised in 1999 ( New Basic Law ) had the wording changed to,Local public entities will conform to the basic principle (of the New Basic Law) and have the responsibility to devise and implement policies for SMEs that are suited to the natural and social condition of each locality by sharing roles as appropriate with the national government. This meant that local governments were given greater roles in implementing SME policies, resulting in the development of SME policies that are unique to each prefecture and municipality throughout Japan. A typical example is the Basic Ordinance pertaining to the promotion of SMEs. A number of prefectures as well as cities and towns throughout Japan are actively engaged in devising Basic Ordinances9). The modified SME measur es have the

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following three major characteristics; First is reinforcement of the safety net measure. Second is developmental integration of three assistance laws. The Law on Suppor ting Business Innovation of Small and Medium Enterprises , theTemporary Law Concerning Measures for the Pr omotion of the Cr eative Business Activities of Small and Medium Enterprises and theNew Business Creation Promotion Law were developmentally integrated and theAct on temporar y Measures for the Promotion of Creative Business Activities of Small and Medium-sized Enterprises(April, 2005) was established. With this, the three assistance laws were systematized as business creation , management innovationandnew business and the showcase of the policies was new cooperation . The support system to create new business was reinforced fur ther. Third is expansion ( competition policy disadvantage cor rection ) , modification reinforcement ( enlargement of the applicable range ) and executive force reinforcement (public announcement of violation detail, naming of violating company ) of the Subcontract Payment Law . However, we have to say the effect is rather limited. Furthermore, the Law to Promote Active Use of Local Resources by Small and Medium Enterprisewas established in June, 2007. This law is aiming at promoting business activities of SMEs in local communities by assisting SME's business activities utilizing local industrial resources, and contributing to healthy development of the national economy through local economy activation . The basic principles set by SMEs ar e applied for approval by Regional Bureaus of Economy, T rade and Industr y via prefectures after approval by prefectures as a basic scheme. SMEs can receive grants, reduced taxation for facility investment, etc. Its feature is, as in the case with new cooperation, experts called coordinators offer in depth assistance for setting business

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What are the SME Policies and Measures in Japan? of local governments ( KUWAHARA [ 2006 ] ) , however, the prosperity of local SMEs is directly connected with the prosperity of the local community. As for the change in the role of local government, it is better to consider that planning measur es while making the best of this opportunity has becomeavailablerather than to think local governments must deal with SME measures. However there are several problems with the New Basic Law. First, the phrasedisadvantage correction is missing while it was clearly stated i n t h e O l d B a s i c L a w, a n d c o r r e c t i n g disadvantage for SMEs is impossible. Of course we should carefully discuss what the meaning of d i s a d v a n t a g e i s i n t h i s c a s e a n d h o w correction should be conducted. Still, it is also tr ue that ther e ar e many disadvantaged conditions in the economic/social environment where SMEs are put compared with those of big enterprises, such as subcontract issues and various gaps, and there are problems remaining. Second, policies putting emphasis on big enterprises are developed. As long as the Small and Medium Enterprise Agency is an outsider agency of METI, SME policies and measures cannot escape from METI industrial policies. It is desirable that not only METI policies but also other various policies/measures established by Ministry of Agriculture, Forestry and Fisheries and Ministry of Land, Infrastructure, Transport and Tourism should consider the potential impact on SMEs as much as possible while formulating the policies. Third, SME measures budget (initial budget) has been reduced since the 1980 s due to the deteriorating financial situation of Japan. The SME measures budget reached its peak in the early 1980 s and then went from approx. 250 billion yen to as little as approx. 120 billion yen in FY2006 (reduced by approx. 100 billion yen since FY2005). Furthermore, 120 billion yen takes only 15.3% of METI general budget ( by the way, SME measures budget is divided among METI, MOF,

plan and industrialization/commercialization.

IV. Conclusion
Finally, let us consider the tasks for the future policy development. First, we can say that the modified Small and Medium Enterprise Basic Law (New Basic Law) can be evaluated in that it assertively evaluated the role of SMEs fit for modern economic society. Specifically, the New Basic Law puts the ultimate purpose of the policy in assisting maintenance/reinforcement of economic forces such as creating new industry, and its specific purpose lies in assisting diverse development of independent SMEs as well as start-ups / new business and business innovation by individual SME to achieve such development. Until then, the role which SMEs could play must have been recognized, but there was no clear statement in the Basic Law. Second, individuality of SMEs was given serious consideration. The SME as a target of policies was grasped only as group , and it was not assistance for the individual enterprise. Originally, SMEs are heterogeneous and pluralistic. Each enterprise has its own individuality. It is considered that this point was recognized again together with the modification of Basic Law. In fact, a number of names of individual SMEs are dispatched from administration, sink tank, and researchers, etc. It is expected that dispatching individual company names will lead to improvement of the brand of SMEs. Third, the New Basic Law emphasizes the point where SMEs are rooted in the local communities. Thus planning local community - led SME measures has become possible. As will be explained later, the movement of establishing basic regulation concerning SME promotion is accelerated all over Japan. Regarding SME measures by local government, some problems are pointed out concerning assistance plan making, measuring the effect of measures as well as the original role

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Subsidy for National Life Finance Corporation2.9% Subsidy for Japan Finance Corporation for Small and Operation Cost of Organization for Workers Medium Enterprises Retirement Allowance Mutual Aid 2.3% 4.8 46 13.7 78 221 Business Creation and Nurturing 38 Assistance Job Caf Improvement, Investment for Japan etc. 5.1 SME Measure Budget 161.6 Finance Corporation Promotion of SME New billion yen100.0% 25.4 83 for Small and Technology Research and Ministry of Economy, Trade 410 47 Medium Enterprises DevelopmentRegional and Industry 120.4 billion Newborn Consortium yen Research and Development, Ministry of Finance 37.4 etc. 2.9% billion yen Ministry of Health, Labor Management Assistance for Small and Grant for Credit and Welfare 3.8 billion 54 Medium EnterprisesStrategic 25.1 Guarantee yen Infrastructure Advancement 406 Corporations, etc. 3.3% Assistance Business, 13.7 Upstream/Downstream Network Operation cost of Organization for 222 Building Assistance Business, Small & Medium Enterprises and Strategic Business to Activate Core Regional Innovation, Japan Downtown Commerce, SME Facility Improvement Cost of Organization for Small & Revitalization Assistance Association, Medium Enterprises and Regional Innovation, Japan Assistance Business for Youth University cooperative Incubation Business, etc. Employment in SMEs, etc. 0.8% 13 Others Cost necessary for Small and Medium Commercial and Industrial Statistics Research, etc.

Figure Breakdown of SME measures budget in FY2006 Unit: 100 million yen, %

Reference: Finance 2006 February issue

and Ministry of Health, Labor and Welfare, and METI has the largest share of the initial budget.) It was 1,150 billion yen in FY1998 when a large modification was done, taking only appr ox. 1 . 2 % of national general budget ( KUWAHARA [ 2006 ] ) . The limited budget is divided for the diverse and very rich assistance menu which we have seen, therefore, a budget of individual measures is restricted (Figure). What should we think about this? There are problems remaining. M o d i f i c a t i o n o f S m a l l a n d M e d i u m Enterprise Basic Law is worth to be valued to a certain extent. Especially local community-led SME policies and measures deserve attention. However, there is a still the question if SME policies and measures are truly policies for SMEs . The menu is diverse, but the content is

complex. How is it for the users, i.e., SMEs? What should be done to tr uly conver t SME policies to policies for SMEs ? There are essential questions unanswered. Notes
This paper is based on a teaching material that I used in the Seminar on Small and Medium Enterprise Development Policies, on 6 June 2008. This Paper was translated into English by JICA (Japan International Cooperation Agency). By hearing from a person in charge in Tohoku Bureau of Economy, Trade and Industry on May 30, 2007 Description of this section is based largely on KUROSE2006 . Refer to SEKI [2002] for Double Structure. Some said if there was any contradiction in simultaneously proceed improving law to secure

1)

2) 3) 4)

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intensification of big enterprises, it was inevitable for mass unemployment of workers to be born. Where would the huge amount of excessive labor force be absorbed? It was the star t - ups and business innovationof existing SME, to deal with this unemployment, and the modification of Basic Law was expected to play such a role (KUROSE [2006]). 9) Refer to URITA [2007] for detail.

new industrial system(big enterprise nurture law ) and establ i s h i n g S m a l l a n d M e d i u m Enterprise Basic Law (SME nurture law). MITI Minister Hajime Fukuda pointed out in his respond in the Diet that there are ver tical divisions and horizontal divisions in the industries . Specific Industries Promotion Law is for measures from vertical viewpoint while Small and Medium Enterprise Basic Law tries to nurture lower part of horizontal division(both) do not contradict (partial omission made). 5) Based on the Organization for Small & Medium Enterprise and Regional Innovation Law promulgated in December, 2002, Japan Small and Medium Enterprise Corporation (excluding credit insurance business) merged with Japan Regional Development Corporation ( excluding regional urban development innovation business ) and Industrial Str ucture Improvement Fund and for med Organization for Small & Medium Enterprises and Regional Innovation, Japanon July 1, 2004.(http://www.smrj.go.jp/kikou/index. html) (Viewed in March 2008) 6) For specific assistance detail, refer to, h t t p : / / w w w. k a n t o . m e t i . g o . j p / s e i s a k u / sangyorich/index_chiikisangyosyuseki.html# 1 ( viewed in May 2008 ) . Act on Temporar y Measures for Activation of Specific Regional Industrial Agglomerations system. 7) In the end, it was modified in 1999 . Reviewing SME policies was deliberated in October, 1992, looking back the 30 years after SME Basic Law was established. But only mid-term report was made at this point. MITI did not clarify the process why modification was not achieved. (OBAYASHI2003p.50). 8) What was the modified Small and Medium Enterprise Basic Law (New Basic Law)? The Act on Special Measures for Industrial Revitalization Industrial Revitalization Law ) was decided on by the Cabinet in July, 1999, coincidentally when modification of the Small and Medium Enterprise Basic Law was deliberated. This idea looked for a solution model for Japanese economic recession after the collapse of Bubble Economy, in the American Economy Revitalization in the 1990s, where the key was promoting selection and intensification of big enterprises whose main method was M&A, i.e, thorough restructuring and u s e o f o u t s o u r c i n g . W i t h s e l e c t i o n a n d

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UEDA, Hirofumi [2004] Small and Medium Enterprises in Modern Japan, Iwanami Shoten Publishers. (in Japanese) UEDA, Hirofumi [ 2005 ] Local Governments and Small and Medium Enterprises Promotion : Development of Small and Medium Enterprise Local Economy Promotion Regulations and Promotion Measures National Conference of Association of Small Business Entrepreneurs Business Environment Research Center, Business Environment Research Annual Report , No. 10 , pp.53-68. (in Japanese) UEDA, Hirofumi [2007] Local Industry Policies and Small and Medium Enterprise Promotion Basic Regulations by Local Government , Jichitai Publishing Co., Ltd. (in Japanese)

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UEDA, Hirofumi, KUWAHARA, Takeshi, HONDA, Tetsuo, YOSHINAGA, Chuichi, Discussion of Small and Medium Enterprises / Venture Enterprises , Yuhikaku Publishing Co., Ltd. ( in Japanese) URITA, Yasushi [2007]Basic Measure to Promote SMEs Enacted in 2007National Conference of Association of Small Business Entrepreneurs Business Environment Research Center, Business Environment Research Annual Report , No. 12 , pp.95-113. ( in Japanese) 200811

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